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Impairment recoveries at the bank improved from -$59 million to a positive $76 million.

Net loans grew 2.91 per cent to $77.3 billion with home lending up 4 per cent while business lending grew 0.7 per cent.

Deposits were up 1.6 per cent to $58.4 billion.

McLean said the result reflected a strong economy and was supported by good credit quality, with the bank continuing to focus on enhanced customer service, quality lending and targeted growth in key sectors.

"We are continuing to focus on helping our customers and the New Zealand economy grow and we are investing in our business to improve the banking experience.

"Customers are taking advantage of today's low interest rates by making extra mortgage repayments, building savings buffers and entering the property market.

McLean said the bank was experiencing strong momentum across the digital side of its business with sales through digital channels up 22 per cent across the year.

He said the bank had lifted term deposits by 3 per cent year on year and its KiwiSaver scheme was continuing to grow, increasing by 19 per cent to $5.2 billion over the year with the average balance up 17 per cent from $11,300 to $13,200.

Net interest income at the bank rose 0.6 per cent to $1.735 billion but its net interest margin fell 13 basis points to 2.02 per cent.

The bank's operating expenses rose 0.9 per cent to $963 million on the back of continuing investment in customer service.